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Kingfisher is seriously DIY. The group, which was once a retail conglomerate, has sold, demerged and closed its way out of an empire that used to include landmarks such as Superdrug, Comet and Woolworths. Kingfisher has become the worldâs third largest home improvement retailer.

The FD Interview Duncan Tatton-Brown, Kingfisher

As if to reinforce the group’s focus, there is a persistent drilling sound – reminiscent of a DIY enthusiast let loose on shelves with a new toy – from the office next door to the room where I am meeting Duncan Tatton-Brown, Kingfisher’s new finance director. Even the company’s website is DIY, inviting users to choose their font and colour scheme on the home page.

Some will be sorry to see the back of the old Kingfisher. Under the colourful and long-lived leadership of Sir Geoffrey Mulcahy, its former chief executive, the group was never boring. Throughout the 1980s and 1990s the empire expanded until 1999 when it announced that it was to merge with Asda, the UK supermarket chain. Then US retail giant Wal-Mart ruined the party and, from 2000, Kingfisher’s strategy reversed.

Investment bankers may commiserate. They are unlikely to see the good old days of multi-million pound fees and a ceaseless flow of advisory mandates as Kingfisher worked its way through bid battles. They included Castorama in France, where hostile takeovers are almost unknown; takeover defences from Dixons in the late 1980s; demergers of Woolworths in 2001 and Kesa, its electrical division, last year; and a £2bn (€3bn) rights issue in 2002.

Established advisers UBS and Goldman Sachs were involved in the Kesa deal, with Lazard and BNP Paribas, but Tatton-Brown adds another handful of prominent names to the list of banks with which the company has a close relationship. During his handover period with predecessor Helen Weir, Tatton-Brown met most but not all its bankers. “However, it’s not my prime focus to keep a dialogue going,” he says.

However, investors must be relieved that the group has emerged from its transformation with a focus and a finance director who looks set to stay. “I’ve had an enjoyable first few months and I’m looking forward to the next four to five years,” says Tatton-Brown.

Since the Kesa demerger last July, the pace of deals at Kingfisher has slowed dramatically. There have been a couple of small disposals in Canada and Poland and the withdrawal from the group’s retail operations in Germany, where it has kept a foothold through a strategic alliance with Hornbach.

However, looking ahead, the job is about tidying up the few loose ends, including Kingfisher’s Paris and US listings. These were put in place as a result of deals but look anomalous. Investors rather than investment bankers will be Tatton-Brown’s primary focus in future.

Tatton-Brown became group finance director in February, succeeding Weir, who resigned unexpectedly last year and has since become finance director of LloydsTSB, the UK high street bank.

“I’ve joined at a good time,” says Tatton-Brown, by which he means personally as well as in terms of the company’s evolution and financial cycle. “Having been at B&Q for three years, I was starting to think about a new role and this is a great opportunity,” he says.

The timing also makes sense in terms of Kingfisher’s development because of its change of focus. The financial year-end has given Tatton-Brown the opportunity to meet investors. This put him in the firing line in presenting the annual results, but he breezed through. “As a finance director, you’re used to standing up in front of lots of people, whether it’s 250 B&Q store managers or investors,” he says.

However, he admits the question and answer session and confronting the press was daunting – “knowing you’re live” – but says there were no questions that stumped him. “And over time, I will get used to what questions are likely to be asked and will have answers prepared,” he adds.

This was not the first time that Tatton-Brown had stepped into Weir’s footsteps; in 2001, he became B&Q’s finance director when she moved from the DIY warehouse subsidiary to group headquarters so the latest succession looks logical. However, Tatton-Brown says he was not the only contender and a full internal and external search for Weir’s replacement was conducted.
“One can never expect to be promoted – I was looking ahead to a plc role and hoped that I was one of the obvious candidates, but there was in no way a guarantee,” he says.

On paper, Tatton-Brown looks untested. At 39, this is his first plc finance directorship, let alone within a company at the top of the FTSE 100. A glance at his curriculum vitae suggests a flair for deal-doing rather than the grind of day-to-day financial management and investor relations. At Virgin, he worked on a £215m sale of cinemas to UGC and at Burton Group, he was involved in the demerger of Debenhams in 1998.

Tatton-Brown cut his teeth in the idiosyncratic and unforgiving retail sector during his eight years at Burton and spent three years running finance at B&Q, the UK market leader, which accounts for more than half of Kingfisher’s profits.

Tatton-Brown may have taken Weir’s position but he recognises that his role is different from hers. While she oversaw three years of almost constant transactions, Tatton-Brown’s job is to persuade investors and analysts that the business is performing. The new-look Kingfisher is more transparent and open to scrutiny than it was when its operations were broader ranging. “There’s now a lot more questioning of the underlying business,” he says.

Kingfisher needs a steady and dependable hand and Tatton-Brown comes across as reassuringly laid-back. The rugby enthusiast and Royal Navy man shows that he is disciplined and has a refined sense of team membership, without any accompanying laddishness.

Tatton-Brown’s prediction that he would be dealing more actively with investors has been realised and his steady nerves have served him well. He has reassured analysts about price-slashing at stores over Easter and a downgrade from Buy to Hold from UBS, the company’s broker and a long-standing adviser. In March, not long after he had taken over, the Swiss bank cut its recommendation as market conditions were weakening and competition strengthening.

The shares fell 2.5% but Tatton-Brown dismisses the repercussions of the episode as short term. “There was probably more of an effect in the press than the market. The fact that their analyst changed their mind is fine. We’re a victim of our own success in that our share price has performed strongly.”

He was warned that a downgrade was imminent but does not believe in trying to persuade analysts to change their minds. “It’s up to me to explain the fundamentals and let analysts make up their own minds,” he says.

In any case, he points out that a diversity of views suggests the shares are fairly priced. Not everyone, however, agrees that Kingfisher is reasonably valued at £3.

Home Depot, the US home improvement group and world leader, put paid to renewed speculation that it would launch a takeover bid for the company earlier this year, citing the fact that a bid premium was built into Kingfisher’s share price, and the weak dollar.

Nevertheless, does the newly streamlined Kingfisher feel vulnerable to takeover?

Tatton-Brown says: “The use of the word ‘vulnerable’ doesn’t come into it. If people want to come along and pay us a premium, that’s good for shareholders. Our job is to increase the value of this business. Undoubtedly, as a single sector business, there is potential for more interest from third parties but it’s not something we focus on or worry about.”

Perhaps first appearances are deceptive and Tatton-Brown’s deal-doing and negotiating experience will come in useful after all.